Airport incentive programs: A European perspective

Robert Malina, Sascha Albers and Nathalie Kroll

No 107, Working Paper Series from University of Cologne, Department of Business Policy and Logistics

Abstract: In this paper we investigate current pricing practices at the 200 biggest airports in the European Union. Our analysis shows that airport incentive programs are, in general, a common tool of airport pricing as they are used at one third of all airports. We also find evidence on the presence of bilateral agreements between airport operators or regional authorities on one side and airlines on the other side which serve as a substitute for published incentive programs. Geographically, usage of the different tools varies substantially between different EU countries. A detailed assessment of the incentive schemes offered at German airports within our broader European sample reveals that the average level of landing and take-off, parking and positioning and passenger charges is generally reduced by more than 10%, at smaller airports even by up to 44%. Given the usually low profit margin of airlines and that airport charges account for up to 10% of total operating costs, these incentives can have an important influence on the economic viability of a route. Moreover, in an airline's multi-criteria-based assessment of potential market entries or route expansions, such incentive schemes might compensate selected weaknesses of an airport's strategic posture.

Keywords: Air Transport; Airports; Pricing; Management; Regulation (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cwa and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Airport Incentive Programmes: A European Perspective (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ucdbpl:107

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